EC steps up investigation into WPP's takeover of Grey

WPP's takeover of Grey Global Group has hit a snag after a demand by the European Commission for more information about the deal.

Brussels regulators want extra details on how the acquisition will affect competition in key markets.

The move could delay completion of the deal, which is scheduled for January. The Commission has the power to impose conditions on the deal, including the sale of assets, and could even reject the arrangement if it concluded that insurmountable anti-trust issues were involved.

Campaign revealed earlier this month that the European Commission had launched an investigation into the £700 million sale.

The Commission's concern is believed to centre on the assimilation of the Grey-owned MediaCom into WPP alongside MindShare and Media-edge:cia.

WPP's dominance will have increased this month following £680 million pan-European Unilever win.

MediaCom has a strong presence in the UK and Germany, where the two WPP networks are already among the biggest.

The European Commission has ruled that WPP's merger application is incomplete.

The group will now have to re-file a full notification, after which the one-month merger review process will restart.

Wall Street failed to react dramatically to the news. WPP stock fell five cents on the announcement to $53.84.

- Comment, p44.

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